Back on Track: Saving for Retirement

On October 5th I paid off my condo.  I paid off that mortgage in less than a year in part because I suspended contributions to my retirement account.  In reviewing my records on 2 June 2008 I submitted the paperwork to stop my contributions (it was effective mid June 2008).  It took slightly more than two years to accomplish the goal of a debt free rental property.  Since my mission was accomplished, I needed to resume my retirement contributions.

Having returned to work yesterday after some time off, I submitted paperwork requesting 10% of pay be set aside as retirement contribution.  So my take home pay will now be smaller.

And it will be even smaller because of other moves made yesterday.  In an effort to ensure I paid off that condo mortgage by mid October, I increased my federal withholdings from six to nine and my District of Columbia withholdings from two to six.  With the condo now debt free, I reduced my federal withholdings from nine to four and my District of Columbia withholdings from six to one. With these moves, my next paycheck will be significantly smaller.

Resuming my retirement contributions was a priority.  I debated starting off with a 5% contribution (to receive the match) and then, in the new year, increase to a 10% contributions.  But, I finally recognized that I had not contributed at all for such a LONG TIME that I needed to bite the bullet and start that 10% contribution ASAP.

What also motivated me to resume my 10% contribution ASAP was a recent letter I received in the mail which stated in part,

According to our records, you are one of about 400,000 FERS [Federal Employee Retirement System] participants not currently contributing your own money to the TSP.  This concerns me because it means that you are not receiving the valuable Agency Matching Contributions that, over time, could significantly boost your financial security in retirement.

I had a sound reason for suspending my retirement contributions.  But with the mission accomplished, I no longer have an excuse.

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